Businesses can reap rewards from hiring the underemployed. Here's how.

Companies looking for skilled workers—or to take advantage of tax credits for hiring the disadvantaged—don't have to go it alone. Dozens of workforce development nonprofits offer job training and placement services around the Chicago area. One of the most established is the Jane Addams Resource Corp., which trains candidates, to industry standards, for manufacturing jobs and places about 80 people a year.

One client is Freedman Seating, where roughly 30 percent of the 832 employees have been hired through partnerships with workforce development agencies. "It isn't all that altruistic," says Dan Cohen, president of Freedman, which has annual revenue north of $100 million. "We need to hire good people to fill the ranks."

What must companies consider when partnering with a workforce development agency? Crain's talked to Guy Loudon, executive director of Jane Addams Resource, to find out.

Crain's: Why would an employer work with a workforce development agency?

Loudon: Studies published by Deloitte and the Manufacturing Institute show that, despite increased interest in job training and workforce development, there will be as many as 2 million unfilled jobs in manufacturing by 2025. What we aim to do is provide very high-quality job and worker training programs that are really aligned with employers' needs.

Q: What size firms do you work with?

A: As small as 24 on the shop floor to as many as 2,000.

Q: What do you demand from jobs in the way of wages and benefits?

A: We are interested in a high concentration of jobs that offer family-sustaining wages, benefits and authentic career paths. The average entry-level wage is $13 to $14 an hour, plus overtime and benefits. We also want to be thinking about industries that will work with the populations that we serve.

Q: Such as?

A: Dislocated workers with obsolete skills to workers with a criminal conviction in their record. Or a single mother who's been working and needs some high-quality skills training and work-readiness skills to allow her to compete in the labor market. Also people who are homeless or in financial distress.

Q: What main steps are involved, from first call to hiring workers?

A: We arrange a meeting with our business services team, which works with employers to get a precise understanding of the job opening's skill level and technical requirements. We also want an understanding of the company's culture. Not every trainee is right for every company. Then we look at job descriptions and openings. We send resumes from trainees who would be a good fit.

Q: What's the time frame? Could a firm make the call on Tuesday and be looking at resumes on Friday?

A: Typically 80 to 90 percent. In our training program, we set and enforce very high standards for accountability. We won't place someone who's struggled to maintain attendance or who hasn't performed in the program. Our trainee is our brand.

Q: How are you funded?

A: On the job training side, funding is primarily government, some foundation, and 10 percent is corporate support. Our customized training programs are good enough that employers pay for them. Employers can spend $1,000 to $2,000 per class for refresher courses, or invest tens of thousands of dollars for multi-year, multi-class programs.

Q: How do you help employers handle any issues involved in hiring under- or unemployed people?

A: Our trainees get income supports. We look at public benefits they can leverage when they are in training, to stabilize their lives. They get employment services and financial coaching. Our goal is to do as much as we can to stabilize their lives before they graduate.

Q: Do you follow up once trainees are placed?

A: Companies hear from a job development person a week into the placement. We follow up with both the trainee and the company to stay ahead of and anticipate any issues that are going to arise.

Q: Anything else employers should know?

A: We have programs set to industry. Trainees can walk in and show an industry credential. It's of value for the employer—they look at these standards and say, "Wow, maybe I will take a chance on this at-risk person."

The federal Work Opportunity Tax Credit, or WOTC, is administered through the Illinois Department of Employment Security. It offers employers tax credits on hires from certain groups, including veterans; recipients of food stamps or supplemental security income; ex-felons; and employees referred through vocational rehabilitation programs.

The credit goes underused because it involves filing a one-page form that identifies job applicants as belonging to one of those groups. "Employers are afraid of it," says Dee Dee Jones, industry coordinator at Manufacturing Renaissance, a Chicago nonprofit that supports economic growth through manufacturing.

Tax credits are issued for up to two years and in two phases: When an employee has worked at least 120 but fewer than 400 hours, and when an employee has worked more than 400 hours. Tax credits can equal 40 percent of first-year wages, up to the maximum credit, and 50 percent of the employee's second-year wages, provided that person has worked at least 400 hours each year. Tax credit maximums range from $1,500 for a food stamp recipient who has worked more than 120 but fewer than 400 hours to $9,600 for a veteran, unemployed for at least six months, who is entitled to compensation for a service-connected disability. Get more information on the U.S. Department of Labor website at DOLETA.gov or the Illinois Department of Employment Security website, IDES.Illinois.gov.

Another federal program, the Workforce Investment Act, reimburses employers for a percentage of wages paid to employees who are acquiring necessary skills while working. The idea is to support full-time employment that leads to self-sufficiency, according to guidelines on the Illinois Workforce Innovation Board website.

Reimbursement per employee covers up to 50 percent of wages, up to $10,000, for a maximum of six months.